Babcock & Brown directors duke it out

After its spectacular collapse in the midst of the global financial crisis, a skeletal Babcock & Brown has emerged out of the shadows to fight over the remains of its former listed residential vehicle,
RCL
.

The ailing property group was yesterday hit with a requisition notice by two disgruntled shareholders angling for positions on the board ahead of a possible recapitalisation by a New Zealand private equity player.

Michael Larkin
, a director of the bombed out B&B, which still ranks as RCL’s largest shareholder with an 11.83 per cent stake, together with Brian Bailison, the CFO of property outfit
Payce
Consolidated, will replace two RCL directors if investors green light the proposal at an extraordinary general meeting. The move comes in the wake of NZ-based Torchlight’s swoop on RCL’s $180 million debt pile, which was owned by Bank of Scotland International.

At the company’s recent AGM investors complained the George Kerr-headed firm could potentially make off with any spoils to be had as the group’s corporate loan is cross-collateralised across its residential portfolio. Concerns were aired about Kerr’s connection to the New Zealand property developer from which RCL bought some assets.

Another major bone of contention was the $12 million fees BOSI was raking in for extending its loans to the company. That’s over $4 million more than RCL’s current market capitalisation.